21 Search . |Share . | More>> Here are selected 2017 transactions of Cheyenne Co

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21 Search . |Share . | More>> Here are selected 2017 transactions of Cheyenne Corporation Jan. 1 Retired a piece of machinery that was purchased on January 1, 2007. The machine cost $62,600 and had a useful life of 10 years with no salvage valud. Dune Sold a computer that was purchased on January 1, 2015. The computer cost $36,400 and had a useful life of 4 years with no salvage value. The computer was sold for $4,400 cash Sold a delivery truck for $9,200 cash. The truck cost $25,000 when it was purchased on anuary $3,700 salvage value. Dec. 31 Dournalize all entries required on the above dates, including entries to update depreciation on assets indent manually. If no entry is required, select "No Entry for the 1, 2014, and was depreciated based on a 5-year useful life with a ation. (R disposed of, where applicable. Date Account Titles and Explanation account titles are aut tícally indented when amount is entered. Do not e Corporation uses straight-line Debit Credit (To record depreciation expense for 2017)

Explanation / Answer

Depreciation under Straight line method = (cost - salvage value) / estimated useful life

Depreciation on Machinery = (62,600 - 0) / 10 = 6,260

Accumulated depreciation on Machinery for 10 years from January 1, 2007 to December 31, 2016 = 6,260 * 10 = 62,600.

Journal entry for retairment of Machinery on January 1, 2017

* Journal entry to record depreciation is not applicable as depreciation would have been recorded on December 31, 2016

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Depreciation under Straight line method = (cost - salvage value) / estimated useful life

Depreciation on Computer = (36,400 - 0) / 4 = 9,100

Journal entry for Depreciation on June 30, 2017

Accumulated depreciation from January 1, 2015 to June 30, 2017 = 22,750 (9,100+9,100+4,550)

Carrying Value on June 30, 2017 = Cost - Accumulatede depreciation = 36,400 - 22,750 = 13,650

Loss on sale = Carrying value - Sale value = 13,650 - 4,400 = 9,250

Journal entry for sale of Computer on June 30, 2017

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Depreciation under Straight line method = (cost - salvage value) / estimated useful life

Depreciation on Deliver truck = (25,000 - 3,700) / 5 = 4,260

Journal entry for Depreciation on December 31, 2017

Accumulated depreciation from January 1, 2014 to December 31, 2017 = 4,260 * 4 = 17,040

Carrying Value on December 31, 2017 = Cost - Accumulatede depreciation = 25,000 - 17,040 = 7,960

Gain on sale = Sale value - Carrying value = 9,200 - 7,960 = 1,240

Journal entry for sale of Delivery truck on December 31, 2017

Accumulated depreciation 62,600 Machinery 62,600

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